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Bhutan remains a largely agrarian society, with the traditional system of subsistence farming giving way to mondernisation and an emphasis on cash crops. Industrial growth has, however, picked up recently, the main driver being a number of mega hydroelectric projects which are expected to earn about 90 per cent of the country's national revenue by 2005.

As the scenario changes with rapid development, the government is pushing private sector growth. With the growing need for privatisation, the government has prioritised private sector growth in the ninth five-year Plan which was launched in July, 2002.

Of the total Nu. 70 billion outlay for the ninth plan, Nu 31.682 billion will recurrent expenses, Nu 34.869 bn was allocated for capital investment, and Nu 3.449 billion was earmarked for debt servicing. A budget of Nu 11,184.6 m for the 2002-2003 financial year represents an increase of seven percent over the revised budget of the previous year and around 16 percent of the Ninth Plan outlay of Nu 70 bn.


Hydro industries dominate the Bhutanese economy. The major hydroelectric projects - Chukha (336 MW), Kurichu (45 MW), Basochu (24 MW) - earn 45 percent of the national revenue. The 1,040 MW Tala project, scheduled to be completed in 2005, is reported to be on schedule. Revenue from power export to India is expected to constitute 90 percent of the national revenue by 2005. Beginning January, 2003, manufacturing industries and information technology training and vocational institutes will be encouraged through the exemption of corporate income tax (CIT) and business income tax (BIT) for three years after commercial operation. Tourism and related industries like hotels are being encouraged.


Telephones: 13,000 subscribers (year 2000)

Telephone system: Digital microwave telecommunication system allows good international subscriber dialling and has a growing penetration of telephones in all the twenty districts.

International: Radio telephone communications; satellite earth station-1 Intelsat (Indian Ocean)

Radio broadcast stations: Bhutan Broadcasting Service. Radio broadcasts covers 90 percent of the country.

Television broadcast stations: Bhutan Broadcasting Service

Direct broadcasts are limited to the capital, Thimphu. The other urban towns receive BBS broadcasts a day later via a videotape service on the local cable channels.

Internet accounts: Approx. 1,000

Roads and transportation

Highways: National highway - 1,591 Km.

Airport: 1 at Paro.
The national airline, Druk Air, operates flights from Paro to Bangkok, Calcutta, Delhi, Dhaka, Kathmandu

Development Aid

Bhutan receives substantial bilateral and multilateral aid, estimated at about 45 to 50 percent of the budget. The government hopes to mobilise Nu. 35 bn in foreign aid for the Ninth Plan. India is the largest donor and the government has requested the Indian government for a contribution exceeding Nu. 20 bn for the Plan.

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